SEQUENTIAL peak-load pricing: the case of airports and airlines
Speaker(s)
Prof Zhang Anming,
Date
20-11-2006
Time
10:30 a.m. to 11:30 a.m.
Venue
Faculty of Engineering, Seminar Room EA-06-04, NUS
Abstract
We investigate airport peak-load pricing and analyze both the price level and price structure with vertically differentiated peak and off-peak travel. Using a vertical structure of airport and airlines, we consider a private, unregulated airport and a public airport that maximizes social welfare. We find that compared to the public airport, a profit-maximizing airport would charge higher peak and off-peak runway prices, as well as a higher peak/off-peak price differential. Consequently, airport privatisation would lead to both fewer total air passengers and fewer passengers in the premium peak period. Although peak-traveling passengers benefit from fewer delays, overall it is not efficient to have such a low level of peak congestion, suggesting that airport privatization cannot be judged based on its effect on congestion delays alone. We also examine a private airport strategically collaborating with the airlines.
Biography
Anming Zhang is a Professor in Operations and Logistics and holds YVR Authority Chair Professorship in Air Transportation at the University of British Columbia (UBC). He received a BSc from Shanghai Jiao Tong University, MSc and PhD (1990, Economics and Business Admin.) from University of British Columbia. Dr. Zhang is the recipient of the “Yokohama Special Prize for Outstanding Young Researcher” awarded at the 7th World Conference on Transportation Research (WCTR) in Sydney, Australia in 1995, and is the recipient of the “WCTR-Society Prize”, awarded to the overall best paper of the 8th WCTR in Antwerp, Belgium, in 1998. Recently, he received two awards from the Canadian Transportation Research Forum for his research transportation economics and policy. Dr. Zhang has published over 60 refereed journal papers in the areas of transportation and industrial organization. He has co-authored three recent books, including: Globalization and Strategic Alliances: The Case of the Airline Industry, 2000, Pergamon Press; and Air Cargo in Mainland China and Hong Kong, 2004, Ashgate. His most recent project is a co-authored study entitiled “Towards Estimating the Social and Enviornmental Costs of Transportation in Canada.” This is an input to Transport Canada’s ongoing effort to estimate the full costs of all transportation modes including automobile, rail, air and shipping.
